(Prepare a budget for a capital project and the related bond issue)

Dellville plans to build an auditorium. The plans were drawn by an architect for $\$ 100,000$. The city accepted a bid from Cracks R Us contractors for $\$ 8$ million for the entire project. The project should take 2 years to build. It will not be started until October 1, 2004, so the completion date is September 30, 2006. The town manager of Dellville, Phyllis Dell, plans to establish a Debt Service Fund for the bonds that will be issued to finance the project. These bonds will be serviced from tax revenues. During 2004, $\$ 100,000$ of revenue is expected to be available. The bonds will pay interest on April 1 and October 1 of each year, beginning in 2005.

Required: Prepare the journal entries necessary to record the preceding budgetary information in the appropriate funds for 2004.